Fonterra staff may trade shares

Last updated 05:00 08/12/2012

Relevant offers


Government moves to make dairy industry more competitive Rural news wrap: October 21 MPI ready to handle foot-and-mouth disease outbreak Global wine shortfall but wine drinkers won't be stung Heavily indebted meat ginger group rides into sunset MyFarm investment company expands into vineyards Vet warns farmers against cheap dairy grazing Pupils make furniture from alternative tree species Catchment plans should be based on realism not idealism Rural residents need to report all crimes

Fonterra has waived a ban on staff trading units in its new Shareholders Fund after a rush to sell into the soaring market post listing.

In an email sent on Thursday, Fonterra chief financial officer Jonathan Mason told staff the company's securities trading policy prohibited buying and selling within six months.

However, the policy was being waived until December 20 "because [Trading Among Farmers] is new so that staff may not have been aware of the policy requirement not to engage in short-term trading, and because staff, when applying for units, may not have expected that they would receive their full allocation, which may have created financial hardship."

More than 1300 Fonterra staff bought units in the Shareholders Fund at $5.50 each through the Friends of Fonterra offer. It appears the Friends were the only investors to receive as much stock as they asked for.

Other buyers - institutions and clients of broking firms - are understood to have had their allocations drastically scaled back to 10 per cent or less of the quantity requested.

Trading in the stock opened on the NZX at $6.66 on November 30 and the price quickly rose to $6.90, delivering a windfall to short-term sellers.

The temporary waiver on short-term trading applies only to staff who don't have access to material inside information.

In the email, Mason said the ban on short-term trading was intended to discourage speculative trading by staff. It was put in place when the board approved Trading Among Farmers, which changed the co-operative's capital structure and introduced the Fonterra Shareholders Fund.

The fund units were trading at $6.65 late yesterday.

Ad Feedback


Special offers
Opinion poll

Is it time for authorities to introduce tougher penalties for poaching?



Vote Result

Related story: Booby traps for poachers cost farmers

Featured Promotions

Sponsored Content

Agri e-editions

Digital editions

Read our rural publications online